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Distributing the VW settlement money

Good for some, less good for others.

Texas cities will soon get millions of dollars to help clean up air quality, but Houston officials say the plan for distributing all that money isn’t fair.

The money is coming from a settlement in the Volkswagen (VW) emissions cheating scandal. Local governments will be able to use the money to reduce emissions from their vehicles and other equipment.

The Texas Commission on Environmental Quality (TCEQ) plans to give the biggest chunk of the money – more than $73 million – to the San Antonio area, mainly because that city is closer than others to getting in line with federal pollution rules it’s currently violating.

Under the state’s plan, the Houston area, which has worse air quality, would get about $27 million.

The City of Houston says about a quarter of the cheating VW cars that were in Texas were driving in the Houston region.

“So we deserve at least a quarter of those funds, because we’re the ones that were harmed,” said Kris Banks, a government relations assistant with Houston Mayor Sylvester Turner’s office.

See here, here, and here for some background. Mayor Turner expressed his disenchantment with the amount allocated to Houston in a press release; you can see all of the city’s documentation on the matter here. The full TCEQ plan for the VW Environmental Mitigation Trust is here, or you can save yourself some time and read the Texas Vox summary of it. The TCEQ is still accepting feedback on the draft plan through October 8, so send them an email at [email protected] if you have comments. The Rivard Report has more.

Who gets the VW settlement money?

That’s the fifty million dollar question.

Volkswagen faces billions of dollars in fines in Texas for its admitted cheating on emissions tests, but the potential payday is being held up as the state Attorney General and county officials fight in court over which government agencies will get to claim a share of the proceeds from the German auto giant.

Under Texas law, county governments are entitled to half the award that any legal action against Volkswagen brings – with the remainder going to state coffers. But with more than 20 counties suing Volkswagen in the aftermath of the emissions scandal, Attorney General Ken Paxton is attempting to toss out all but two of the counties from the case, leaving the state in charge and the counties with no chance to claim any of the penalties.

The stakes are high for both the state and counties. A single county could reap tens of millions of dollars in penalties, at a time when low oil and gas prices are straining budgets across Texas and leading to cuts in public services.

“It’s extremely important for the counties. We’re all strapped,” said Anthony Constant, a Corpus Christi attorney representing Dallas and other counties in the suit. “I have no idea what (the AG’s office) is doing or why they’re doing it, but it appears to me they have some concern it would somehow be bad for them if the counties were allowed (to) proceed.”

The Attorney General’s Office declined to comment. But in a filing earlier this year, Paxton argued that it was their office’s right to uphold Texas’ environmental laws and allowing the county lawsuits to proceed would lead to “the unconstitutional result” of Volkswagen being tried and fined multiple times for the same violation.

[…]

In Texas, the company settled violations of the state’s anti-fraud laws for $50 million in November. But Volkswagen still faces far more costly violations of the state’s air pollution laws, which could potentially mean fines of between $50 and $5,000 per day for all 32,000 of its clean diesel vehicles registered in Texas. Some, which were sold under both the Volkswagen and Audi brands, have been on the road close to a decade.

But the process of determining the extent of those penalties is being held up by the infighting between the state and counties over who gets to sue Volkswagen.

After the trial court in Austin ruled the counties could remain in the case, the attorney general’s office filed an appeal in October with the Texas Third Court of Appeals. Sensing an opening, Volkswagen’s attorneys filed a motion to delay the entire trial until the question of the county lawsuits was resolved.

With the matter of the county lawsuits potentially headed to the Supreme Court – a process that can take years – the state and counties’ attorneys both argued against delaying the trial. But in January the appellate court sided with Volkswagen.

See here, here, and here for the background. This settlement is from state-level litigation; there was a separate federal lawsuit settlement that netted money for the state, as only the state was involved. As the story notes, Harris and Fort Bend Counties filed their lawsuits first, then the state got involved, and subsequently tried to boot all the counties out as plaintiffs. I personally see no reason for that, but this is what the judge will have to decide.

Texas gets VW lawsuit settlement money

Not bad.

Texas will receive more than $190 million for environmental mitigation under a multibillion-dollar settlement in the Volkswagen emissions cheating scandal approved by a federal judge in San Francisco on Tuesday. Volkswagen buyers will have the option of buybacks or repairs.

U.S. District Judge Charles Breyer authorized the $15 billion agreement, which was first detailed this summer. It awards hundreds of million of dollars to dozens of states and includes a $10 billion buyback program to compensate consumers who bought Volkswagen Group vehicles, including Audis. Under the settlement, the German automaker will establish a $2.7 billion trust fund for projects designed to mitigate environmental harm caused by excess emissions from its vehicles. It also has agreed to pay Texas $50 million in civil penalties and attorneys’ fees for violating a state consumer protection law that bans deceptive advertising.

[…]

Environment Texas called on the state to invest the money in state programs aimed at getting exhaust-spewing or diesel-powered vehicles off the roads, along with rebates to entice people to buy eco-friendly electric vehicles.

“Given Texas’ continuing struggle to reduce harmful air pollution, the state needs to make a greater investment in clean air and the VW funds can help us get there,” the Austin-based group said in a statement. “However, it may be tempting for legislators to play shell games with the VW money and swap it out with dedicated clean air funds, resulting in no net gain for air quality. That would be a harmful mistake.”

See here and here for some background. Terms of the settlement, which covers about 32,000 cars sold in Texas, can be found here. If you might be one of those VW purchasers, you can look up how this affects you. You won’t get full buyback price, but you will get something.

Note that this is not the end of the line for VW litigation. Harris County filed a lawsuit against VW on its own before the state did; Dallas County did so as well. The state wanted them to drop their actions, but they did not. Because those suits were filed in state court, not federal court, they were not part of this agreement. I’ve asked the Harris County Attorney’s office for more information on where that stands. This is what they told me:

There’s no court date set at this time. Here’s some additional details:

The parties have started taking depositions of VW fact witnesses, and we expect those depositions to continue to be scheduled.

We have started reviewing documents that VW has produced in this matter.

The Federal settlement addressed the consumer claims and EPA’s claims for environmental remediation which are different than the civil penalties that Harris County is seeking.

In a recent ruling, Judge Sulak (in Travis County) declined the State of Texas requests to dismiss the claims that the Texas counties that filed after the State filed its claims against VW. The State of Texas is seeking to appeal that ruling. Because Harris County filed its claims prior to the State of Texas, the State of Texas has recognized that its argument on this issue does not apply to Harris County.

So there you have it. More on the federal settlement is here.

Texas to get VW settlement money

It’s something.

Volkswagen has agreed to pay Texas $50 million in connection with the German automaker’s admitted peddling of diesel vehicles rigged to surpass emissions limits, Attorney General Ken Paxton announced Tuesday.

The partial settlement is part of a larger, multibillion-dollar agreement unveiled Tuesday that awards hundreds of millions of dollars to dozens of states and includes a $10 billion buy-back program to compensate consumers who bought the vehicles. Various media reports described it as the largest auto-related class-action settlement in U.S. history.

[…]

Paxton sued Volkswagen Group of America Inc. and parent company Audi of America in October in connection with the automaker’s admitted use of software that allowed its diesel vehicles to circumvent emissions limits. The lawsuits alleged violations of the state’s consumer protection laws and clean air standards. They were among hundreds filed in the United States against VW by governments and consumers.

As part of the settlements announced Tuesday, VW agreed to pay Texas $50 million in civil penalties and attorneys’ fees for its violations of the Texas Deceptive Trade Practices Act, which bans false advertising and sale of misrepresented products. About 32,000 diesel cars capable of emissions cheating have been sold in Texas, according to U.S. Environmental Protection Agency figures. That’s compared to about 480,000 nationwide and 11 million globally.

“For years, Volkswagen intentionally misled consumers about the environmental and performance qualities of the vehicles they sold in Texas,” Paxton said in a statement. “When companies willfully violate the public’s trust, we will hold these entities responsible. This settlement will both compensate the victims of Volkswagen’s fraud and punish the company enough to deter future fraud.”

He noted Texas has not yet resolved claims that VW violated state clean air laws, and that Texas continues to pursue related penalties. A Paxton spokeswoman would not say how much those might amount to.

See here for the background on the Texas lawsuit, and here and here for more about the national case. It’s nice to see the AG’s office on the side of a worthwhile case for once, though honestly this was as close to free money as it gets. I mean, the initial suits were filed less than a year ago. VW had basically admitted fault, and they clearly wanted this to go away. Good on them for that, but boy do they still have a lot to atone for.

And they’re not out of legal trouble just yet:

Several local governments in Texas, including Harris County, have also sued VW — over objections from Paxton — but they were not included in the settlements announced Tuesday. The Harris County lawsuit is pending in Travis County district court.

See here and here for the background on that. I presume Paxton didn’t do anything beyond send a letter to the relevant county attorneys asking them to back off; if he did, I couldn’t find any mention of it. It seems likely to me that with the big settlement out of the way, these others will soon follow, but we’ll see.

Thanks but no thanks, Ken

Harris County will continue to pursue its own lawsuit against VW.

Harris County has responded to Ken Paxton’s request to drop its lawsuit against scandal-plagued Volkswagen. Its answer? A polite no.

[…]

In a reply to Paxton dated Oct. 15, [Harris County Attorney Vince] Ryan wrote, “we were pleased to learn that the Office of the Attorney General has joined Harris County” in the claims against Volkswagen. “We look forward to working together once again in connection with this important effort.”

In other words: No, thanks.

By abandoning their lawsuits, the counties would leave millions of dollars in potential damages on the table.

That’s because under state law, when local governments file such suits, the state is required to join as a “necessary and indispensable party.” In these types of cases, the counties and state split any money.

But the counties would not directly get a share of any damages in the suits Texas is leading.

Any civil penalties recovered in Paxton’s environmental lawsuit would flow into the state’s general fund, while penalties from the consumer protection case will go to the Texas Supreme Court’s judicial fund for programs that provide legal services to poor people, said Cynthia Meyer, a spokeswoman for Paxton’s office. Any other “meaningful restitution” she added, would go directly to consumers duped by Volkswagen’s emissions software.

Ryan’s letter to Paxton noted that, in 1998, Harris County, along with other counties, recovered about $2.2 billion from the tobacco industry through litigation — on top of the billions that the state recovered for itself.

See here, here, and here for the background, and here for a copy of Ryan’s letter. I’m not an attorney, but as I said before I don’t see why Harris or any other county that wants to pursue its own lawsuit should bow to Paxton’s request. It doesn’t make good financial sense to do otherwise, if a county has the resources to handle the litigation itself. Many counties don’t, but Harris does, and that should be good enough. Stick to your guns, Vince.

Paxton wants to sue VW all by himself

Really?

Seeking to fight scandal-plagued Volkswagen alone, Attorney General Ken Paxton is asking two Texas counties to halt their lawsuits against the automaker — a move highlighting friction between Texas and local governments pursuing tens of millions of dollars in court.

The Republican made the request in letters sent Friday to top attorneys in Harris and Fort Bend counties, both of which beat Paxton to the punch in filing lawsuits over the company’s admitted use of software that allowed its vehicles to sidestep emissions limits.

“The alleged violations by VW harm Texans throughout the state, and a separate Harris County lawsuit undermines the ability to achieve a comprehensive and just statewide resolution of this matter on behalf of Texas,” Paxton wrote in a letter to Vince Ryan, the Harris County attorney. “The Office of the Attorney General requests that the county stand down on its claims and cooperate with the Office of the Attorney General in pursuing the state’s interests – which includes Harris County’s interests – on matters arising from VW’s wrongful conduct.”

Paxton used similar language in a letter to Fort Bend County Attorney Roy Cordes, Jr.

Paxton wrote that both counties failed to communicate with his office before filing their suits, and he knocked them for hiring outside legal help, saying the move “appears to be an unnecessary expense.” The Texas Tribune obtained unsigned copies of both letters.

By abandoning their lawsuits, the counties would leave millions of dollars in potential winnings on the table.

“Harris County, Texas wants a place at the table. That’s why we’re first in line and the first government in the world to sue Volkswagen,” said Terry O’Rourke, special counsel with the Harris County attorney’s office. O’Rourke had not yet seen Paxton’s letter.

“We’ll look at whatever General Paxton’s request is and evaluate it with sincerity,” he added.

In Fort Bend, Randy Morse, the assistant county attorney, said his office could not comment because it had yet to receive the letter.

[…]

Last week, the city of Dallas announced it planned to sue Volkswagen, but it reversed course on Monday, saying Paxton’s statewide suit would do the trick.

“We look forward to the state taking action in the upcoming months to require Volkswagen and Audi to bring the affected vehicles into compliance with state environmental laws and improve air quality in the Dallas-Fort Worth area, and we urge the state to do so in an expeditious manner and at no cost to affected motorists,” the city said in a statement.

See here and here for the background. Personally, I don’t know that I would trust the state to look after my own interests as well as I would in a case like this. Pursuing environmental justice is not exactly one of Ken Paxton’s strong points. If I were in those County Attorneys’ shoes, my reply would be to suggest that Paxton file a brief with the judge in my case stating his position, and let the judge decide the best course of action from there. The Press and the Chron have more.

State of Texas sues VW

Bandwagon time!

Following in the footsteps of Harris County and the city of Dallas, the state announced Thursday it is suing Volkswagen in connection with the German automaker’s admitted use of software that allowed its vehicles to circumvent emissions limits.

Attorney General Ken Paxton announced two separate lawsuits against Volkswagen Group of America, Inc. and subsidiary Audi of America, alleging violations of the state’s consumer protection laws and clean air standards.

“The lawsuits allege the companies misled Texas consumers by marketing and selling diesel vehicles as ‘clean’ while knowing that these vehicles were designed to meet emission standards only when being tested,” a news release said. “Outside of the testing station they would emit up to 40 times the allowable standard for certain pollutants.”

About 32,000 diesel cars capable of emissions cheating have been sold in Texas, the release said, citing U.S. Environmental Protection Agency figures. That’s compared to about 480,000 nationwide and 11 million globally.

“For years, Volkswagen intentionally misled consumers about the environmental and performance qualities of the vehicles they sold in Texas,” Paxton said in a statement. “When companies willfully violate the public’s trust, a penalty must be paid, and we will hold these entities responsible.”

See here for the background. Again, I don’t know why any government entity wouldn’t file suit against VW. They’ve already admitted liability – this is as close to a slam dunk as it gets in civil litigation. How long it takes and how much you ultimately get are open questions, but the winning and losing part isn’t. And hey, now we know what it takes to get Texas to enforce environmental standards. It’s a win all around!

County sues VW for $100 million

Good.

Vince Ryan

Vince Ryan

Harris County on Tuesday set in motion a $100 million environmental lawsuit against Volkswagen, claiming emissions from 6,000 diesel cars circulating on roadways in the region have caused harm to the population. County Attorney Vince Ryan said his review of filings indicated this could be the first government suit against the car company since the executives admitted to cheating on emissions monitoring in diesel cars released since 2009.

Commissioners Court approved the suit Tuesday morning and hired three law firms to handle the matter on a contingency basis. The county plans to file the suit Tuesday afternoon, according to Robert Soard, first assistant county attorney.

The county does not have Volkswagens in its central fleet, according to Dre Dupont, who oversees the vehicles. Instead, the focus of this suit will be on the extent to which the car company and its affiliates violated Texas emissions standards, creating a public health hazard for everyone within the borders of Harris County.

The Press is pretty snarky about this, but as Judge Emmett noted in the Chron story, VW has already admitted liability. Why wouldn’t we sue? I don’t know what the likelihood is of collecting a substantial sum, and it may be that our suit gets consolidated with the many others already out there, but VW deserves all the trouble it’s going to get. Good for Vince Ryan for taking the initiative.

No more inspection stickers

That’s the plan, and I think it makes a lot of sense.

Texas’ vehicle inspection stickers would become a thing of the past under legislation approved unanimously Monday by the state Senate.

But there’s a catch: Vehicles still would have to be inspected before they could be registered with the state, and diesel vehicles would, for the first time, have to pass an emissions test.

“Technology allows Texas to move away from vehicle inspection stickers, so we can combine the inspection with the registration,” said state Sen. Royce West, D-Dallas, the author of Senate Bill 1350.

Twenty-seven other states already use a single-sticker system, Department of Public Safety officials said Monday.

“It will mean there will be one registration sticker on your windshield, instead of that sticker and an inspection sticker. That’s one less sticker on your windshield that you can get a ticket for,” West said. “It’s about less stickers, less government.”

A study by DPS and the state Department of Motor Vehicles showed that the switch would reduce fraud, which has plagued the vehicle inspection system for years.

Here’s SB 1350, which still has to pass the House. The fraud issue is bigger and more extensive than you might think. By eliminating stickers and tying inspections to your vehicle registration, this would mean no more sticker stealing, and no more “surrogate” vehicles being inspected on behalf of some other car. I’m sure there will still be ways to cheat the system, but this is a step in the right direction. Plus, emissions testing for diesel vehicles is something we should have been doing for years. Good idea, good bill, let’s hope the House passes it.

Rodney Ellis

Nice profile of State Sen. Rodney Ellis, which talks about his propensity for introducing long-shot bills, and his persistence in getting some of them passed over the course of multiple sessions. This bit summarizes it well:

“Occasionally, Senator Ellis will pick an issue whose time has not yet come, but that’s the legislative process, in that sometimes it takes a little time so we can get a consensus and a majority,” said Lt. Gov. David Dewhurst, a Republican, who calls Ellis one of the state’s “brightest, most charismatic senators.”

The article mentions his bills to have Texas adopt California’s emissions standards for automobiles, something he first introduced in 1991. I’d cite his work on innocence matters as well, which are getting a higher profile this session thanks to the large and increasing number of people who can speak to it from their personal experience. It’s good to have some legislators focus on the big picture issues, and Sen. Rodney Ellis does a good job of that.

California breathin’

We may get some cleaner air to breathe here in Texas thanks to California and President Obama.

Obama ordered the Environmental Protection Agency to review the Bush administration’s refusal to allow California and 13 other states to set the nation’s toughest vehicle emissions standards.

During a ceremony in the White House East Room, Obama signed a directive requiring the agency immediately to review that December 2007 decision denying California permission to limit carbon dioxide emissions from cars and trucks.

“The federal government must work with, not against, states to reduce greenhouse gas emissions,” Obama said.

State Sen. Rodney Ellis, D-Houston, who pushed unsuccessfully for tougher car emissions standards in the 2007 legislative session, says his measure may have a better chance this session now that one key obstacle — federal opposition — is likely to disappear.

“It’s an uphill battle to get the votes in the House and in the Senate,” Ellis acknowledged. “But on my side in the Senate, members who in the past were very reluctant to consider environmental legislation have gotten much more educated, as I’ve seen in private conversations.”

Ellis’ legislation would adopt all of California’s proposed emissions standards, as the 13 other states already have and several more are considering.

Rep. Mark Strama, D-Austin, has filed an identical bill in the House.

The bills in question are SB119 and HB776. I don’t know that this will give them a leg up, but it does at least knock down one objection to them. We know Speaker Straus is much more open to green legislation than Tom Craddick was. If Sen. Ellis’ assessment of his colleagues is accurate, then who knows?

Adopting the California standard in Texas would cost new-car buyers about $7 more per month if they financed a car over five years, Ellis said, but they would save up to $18 per month in fuel costs based on $1.74 per gallon of gas.

Many industry groups expressed opposition to the administration’s move.

The American Petroleum Institute said it “supports President Obama’s desire to fortify the nation’s energy security with a comprehensive energy policy” and said that since 2000 the oil and gas industry has invested $42 billion in “zero- and low-carbon” research and development. But the action contemplated in Monday’s announcement isn’t the best approach, the group said.

“Creating a patchwork regulatory structure across multiple states would most likely impose higher costs on consumers, slow economic growth and kill U.S. jobs,” the trading group said in a statement.

And carmakers have complained that developing vehicles that comply would cost billions of dollars.

But if the EPA agrees to California’s standards, Texas likely will be affected regardless of whether the Legislature approves Ellis’ measure. The 14 states that have adopted the tougher emissions standards represent more than half the nation’s population, so the practical effect of EPA approval of California’s rules would be to force automakers to raise fuel efficiency standards across their fleet.

Yeah, that would seem to be the obvious answer to the automakers’ complaint. I mean, nobody is forcing them to maintain two different standards. And let’s face it, when it comes to environmental matters, these guys are a bunch of weasels who generally need to be forced to do the right thing. So forgive me if I am unmoved by their argument.